CPR purchases
the Quebec, Montreal, Ottawa & Occidental (QMO&O) Railway from
the Province of Quebec. The line links Quebec City to Montreal to
Hull, Que. It connected to the CCR at Ottawa via a bridge across
the Ottawa River at LeBreton Flats

The advent of the Canadian Pacific Railway in 1881 to build the
first Canadian transcontinental railway changed the status quo in Ontario.
The CPR was supposed to started in the middle of nowhere west of Lake Nippissing
(around what is today North Bay). The members of the CPR syndicate
weren't dumb.
George Stephen, President of the Bank of Montreal, his
cousin Donald Smith who ultimately controlled the Hudson's Bay Company,
had come to Canada years before with little in their pockets to make their
fortunes. Duncan McIntyre had made his fortune in trade in Montreal.
R.B. Angus was the General Manager of the Bank of Montreal. James
J. Hill had a monopoly on the Red River trade through his steamboats.
Their first railway line, the St Paul, Minneapolis & Manitoba Railway,
had brought these men together in business. They had changed a money-loser
into a very profitable enterprise through their sharp business skills.
In order for the CPR to succeed, the syndicate needed
access to Atlantic seaports and the heartland of southern Ontario.
If they didn't succeed, their enterprise would be bankrupt. And so they
started on an acquisition program of buying, leasing, or building railways
in Ontario and Quebec.
In 1879, Duncan McIntyre, a member of the syndicate, gained
control of the Canada Central Railway (formerly the Brockville & Ottawa)
which went from Brockville on the St Lawrence River to Mattawa on the Ottawa
River, with a branch line from Carleton Place to Ottawa. The CCR
was amalgamated with the CPR on June 9, 1881. The CPR was now just
a short distance from Lake Nipissing.
At the same time, through an associated company, the Ontario
& Quebec (O&Q) Railway, the syndicate took over the money-losing
Quebec, Montreal, Ottawa & Occidental Railway from the Quebec government
on May 17, 1882. The QMO&O traversed the north shore of the St
Lawrence and Ottawa Rivers from Quebec to Montreal and Hull. It linked
up with the CCR via a bridge across the Ottawa River at LeBreton Flats
in the west end (at that time) of Ottawa. In one swoop, the CPR had
connected to Atlantic ports at Brockville, Montreal, and Quebec City.
But this was only the start of the CPR empire in Eastern Canada.
The
Toronto, Grey & Bruce Railway (TG&B) connected Lake Ontario at
Toronto to Lake Huron/Georgian Bay at Owen Sound. Members of the
CPR syndicate had been associated with the TG&B for many years. On
July 26, 1883, the TG&B was leased to the O&Q for 999 years.
The CPR had access to the markets north of Toronto and was able to transship
supplies from Owen Sound via Lake Huron and Superior to Fort William/Port
Arthur (today called Thunder Bay). But this was just the start.
The Credit Valley Railway connected Toronto to Galt and
St Thomas. Through connections with the Canada Southern Railway at
St Thomas, the CVR had access to American lines. George Stephen of
the syndicate had been a longtime business associate of George Laidlaw
- one of the principals of the CVR. Through the Bank of Montreal,
Stephen had rescued the CVR in time of financial difficulty. On November
30, 1883, the CVR was amalgamated with the O&Q.
The CPR, in addition to having access to
Atlantic seaports via the CCR and the QMO&O, now had a railway network
in the heartland of Southern Ontario. The problem was to now connect
these two parts together. Under the Ontario & Quebec Railway,
the syndicate constructed a line from Toronto to Perth, a branchline on
the Canada Central to Smiths Falls. On May 5 1884, the O&Q linked
up with the CVR and TG&B at Toronto with a line from Perth through
Tweed and Peterborough.
In
taking control of the Toronto, Grey & Bruce and Credit Valley Railway,
then linking them with their ownership of Canada Central Railway and Quebec,
Montreal, Ottawa & Occidental, the CPR had invaded the Grand Trunk's
exclusive territory!! This meant war!! And so started a tidal
wave of ruinous railway construction that didn't end until after World
War I.

Map of the CPR in Eastern Canada in 1884. The
Canadian Pacific, by gaining control of a few key railway lines and linking
them together through the Ontario & Quebec Railway, had established
a very substantial railway network in the heartland of Ontario and Quebec.
By the end of the year, the CPR faced a cash crisis - there was no more
money to complete the transcontinental line. Stephen and Smith had
pledged all of their assets to build the CPR. The government of Sir
John A. Macdonald balked at lending more money to the railway.
But fate intervened. In early 1885, out
in Manitoba (today a part of Saskatchewan), the Métis under the
leadership of Louis Riel started a rebellion which resulted in the killing
of settlers. The CPR came to the rescue by offering to transport
troops from Eastern Canada to the unsettled prairies - in the middle of
winter. This railway network, although not fully completed along
the north shore of Lake Superior, transported Canadian troops from the
east to the west to put down the Riel rebellion. The Canadian government
then rescued the cash-strapped CPR by advancing the railway $5 million.